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Hey Reader!

Last week, we talked about deducting. It is flashy, common, and often overused. Now we'll get into something more mundane, yet ultra effective. The second tax strategy pillar is deferring.

Deferring is one of my personal favorites because it buys you time. It does not eliminate tax, but it shifts it into the future, and that alone can change the entire game. You are using arbitrage (playing between current and future tax rates) to determine the optimal tax outcome over the course of your lifetime. If this pillar was a position in football, it would be holding midfield (think Busquets, Rodri). Methodical, patient, and known for precision.

The classic example is your RRSP or 401(k). You contribute now, reduce your taxable income today, and only pay tax when you pull the money out in retirement. Why does that work? Because most people are in a lower personal tax bracket when they retire. That difference is where the magic happens. (Note that you will still be wealthy. A low tax bracket implies low income, which is expected when you have an abundance of assets).

But deferring is not just for retirement. Incorporated creators do this every day by retaining income instead of paying it all out. When done correctly, it allows you to stay in a lower personal tax bracket while still growing your creator business behind the scenes.

Next week, we'll dive deeper into this concept, especially the need to pay yourself the right way to maximize the deferring tax pillar (salary, dividends, loans).

As always, remember Rony's mantra - 1) Leverage the tax code to activate tax write-offs and income-generating assets. 2) Don't spend a dollar to save a quarter.

Resources for Creators

Free Initial Consultation: It's time to be proactive with your creator business taxes! Book a session today.

Creator's Corner: The Canadian edition is available now on my website and is the best handbook for creators navigating their ventures.

Creator's Corner (US): Coming REAL soon!

Creator's Corner Tax Community: A community of creators centered around helping each other navigate the tax world in the creator industry. DIY tax planning software, DIY QBO integrations and DIY financial dashboards included, all with access to a CPA and other creator businesses. Reply "TRIBE" if you'd like to join!

Love y'all!

Rony Fogain, CPA Fogain & Associates Professional Corporation The Content Creator's Firm Austin, TX/Toronto, ON Email: admin@rfogain.com​ Tel: 647-510-7103 Tel (US): 512-460-8836

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